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The nationalization debate has been sizzling on France’s front
burner since last week when Industry Minister Arnaud Montebourg
lashed out at the world’s largest steelmaker, ArcelorMittal.

He threatened to nationalize its plant in
Florange where some old blast furnaces had been shut down for a
year-and-a-half. At stake were 2,500 jobs.

“We no longer want Mittal in France,” he told the Indian
owners—though the company has 20,000 employees in France.

Breaking into a cold sweat, executives around France reevaluated
their investment plans.

Just then, unemployment hit a 14-year high. Creating jobs was
needed more than anything. Scaring off investment was not.

Whether his threat was a form of extortion or an announcement of
a hostile takeover remains to be seen. But it opened the door for
unions at another troubled company to demand nationalization, and
the socialist government might not be able to resist.

The three unions—CFTC, Solidaires, and Force Ouvrière—that
represent the workers at the shipyard Chantiers de l’Atlantique
at Saint-Nazaire on the Atlantic coast demanded in a joint statement today that the
government “must become totally involved to guarantee the
future of the shipyards” and must become “a majority
shareholder.”

Chantiers de l’Atlantique is famous for building the largest
cruise ships and supertankers in the world, including the Queen
Mary 2, the largest ocean liner ever. But it’s in trouble. Its
future is uncertain. Its order books are empty; no new orders are
coming in. By 2013, after finishing the current projects, it will
be practically without work.

Employment at the shipyard is down to 2,100 workers, the lowest
in its history. Of those, about 1,000 are on partial
unemployment. Of the 4,000 subcontractors who still worked there
a few months ago, only a little over 1,000 are left. It’s tough
for companies in France [Stimulating The Public Sector, Suffocating the
Private Sector].

In their desperation, the unions appealed to Montebourg for help,
initially last June. Over the summer, they asked for another
meeting. Without response. To draw attention to the “silence of
the government,” 500 workers went on a one-hour strike at the end
of September. Voilà, on October 15, when Montebourg was
in Nantes for another event, the union leaders got their meeting.

Afterwards, instead of making earthshaking announcements, he only
said that the government would do “its utmost” to defend the
shipyard. “Our position is to find economic solutions, in other
words, work,” he said. That was a bit too wishy-washy for the
union leaders.

But they did sense that he was determined to maintain the
shipyards and the special skill sets. Hence hope that the
shipyard might not be closed and that a government sponsored
program could retrain workers to build offshore oil and gas rigs
or windmills. But diversification, if at all possible, would take
time. The immediate solution was nationalization. Once the state
owned it, closing the shipyard and laying off workers would
become, for a socialist government, politically infeasible.

One of the largest shipbuilders globally, STX Europe owns 66.66%
of the shipyard. Headquartered in Oslo, it owns 15 shipyards
around the world. It, in turn, is owned by the Korean group, STX
Corporation. And who owns the remaining 33.34%? The usual
suspect: the French government.

The unions are blaming the majority owners, “the Koreans,” a
convenient and distant target. “We don’t see the Koreans, they
have done nothing. It’s the state, a minority shareholder, that
finds itself playing substitute boss, even though that’s not its
role,” said several union sources.

While privatizing state-owned companies has been all the rage
since the mid-nineties, by socialist and conservative governments
alike, the current morass in the private sector has stopped that
process. The dominoes are lined up. Nationalization is being
brandished as a solution.

The government, once it owns a controlling share, can force
companies to employ people, whether or not they have any work.
But it’s an illusory solution. The government already owns a
third of Chantiers de l’Atlantique, as it owns major stakes in
many large companies. Some, like mega utility EDF, it owns
outright. Despite—and cynics say, because of— this profound
government ownership, the private sector is in deep trouble, and
even more government ownership is unlikely to cure its ills, but
might strangle it altogether.

On the other side of the Rhine: In September, the German Labor
Ministry sent a draft report “on Poverty and Wealth” to other
ministries to be rubber-stamped. Only the final report would be
made public. The draft was to remain hidden. But it seeped to the
surface immediately. And it was hot. Too hot. Now a new version
leaked from the Economy Ministry—without the offending data and
comments. Read.... Censored: Poverty Report in Germany.